Rohitbhai Bhikhabhai Chauhan vs. The State Of Gujarat

Held

The Court held that the applicants are not entitled to anticipatory bail. Regarding the first issue, the Court considered the gravity of the offense, categorizing it as an economic offense involving a substantial amount of public money (Rs. 137.00 crores). The Court noted the Supreme Court's stance in a similar case where bail was not granted despite the accused being in custody for a significant period, and applied this reasoning to the present case. The Court also referred to the Supreme Court's decision in Sushila Aggarwal, stating it kept the guidelines in view but found the applicants not eligible for anticipatory bail based on the facts. Regarding the second issue, the Court relied on the Division Bench decision in Vimal Yashwantgiri Goswami, which held that officers effecting arrest under Section 69 of the GGST Act are not legally obliged to comply with Sections 154 to 157 and 172 of the Code of Criminal Procedure. The Court also expressed apprehension that granting bail could lead to tampering with evidence and witnesses, and the applicants' unavailability for trial. Therefore, the applications were dismissed.

Facts

The applicants, Chairman and Directors of M/s. Madhav Copper Limited, a public limited company, sought anticipatory bail under Section 438 of the Code of Criminal Procedure. The applications were filed in connection with a case registered with the Deputy Commissioner of State Tax, Enforcement, Division-2, Ahmedabad. The company is accused of claiming Input Tax Credit (ITC) worth Rs. 137.00 crores by allegedly obtaining fake bills for purchases totaling Rs. 762.00 crores from 36 different firms. The respondents allege that the suppliers collected tax but did not pay it to the government. The applicants contend that their purchases and sales data match, payments were made through banking transactions, and all records have been seized by the respondents. They also argue that no FIR has been filed, and GST officers lack investigative powers.

Key Issues

1. Whether the applicants are entitled to anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973, given the allegations of claiming wrongful Input Tax Credit amounting to Rs. 137.00 crores by obtaining fake bills for purchases worth Rs. 762.00 crores. 2. Whether the provisions of Sections 154 to 157 and 172 of the Code of Criminal Procedure are applicable to arrests made under Section 69 of the Gujarat Goods and Services Tax (GGST) Act. Petitioner's Arguments: The applicants argued that no FIR has been filed, and GST officers are not police officers with investigative powers under the GGST Act. They contended that the company's purchase and sales data match, payments were made through banking channels, and all records are with the respondents. They also submitted that no explanation was called for by the department before issuing a show cause notice, and proceedings under Sections 73 or 74 of the GGST Act have not been initiated for subsequent periods. They relied on various High Court decisions granting anticipatory bail in similar GST offenses and the Supreme Court's decision in Satender Kumar Antil. Respondent's Arguments: The Public Prosecutor argued that the offense involves a huge amount of public money (Rs. 137.00 crores) and is an economic offense. They expressed apprehension that if bail is granted, the applicants might tamper with evidence and witnesses, and would not be available for trial. They also relied on a Supreme Court order in a similar case where bail was not granted despite prolonged custody, and a Gujarat High Court Division Bench decision in Vimal Yashwantgiri Goswami, which held that arrest provisions under Section 69 of the GGST Act do not necessitate compliance with Sections 154-157 and 172 of the CrPC.